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What Are Third-Party Cookies and How Do They Affect Affiliate Marketing?

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Finding the perfect audience is probably the best thing you can do to improve your campaign's success rate. To achieve this, marketers have found various ways of tracking and analyzing potential customers (leads) and adjusting their campaigns to suit them.

One of the main ways of achieving this is through something called cookies. You may be wondering why we are talking about a desert, but these cookies are nothing like the ones you will find in your pantry. They are actually a simple and effective way to find out a lot of incredibly detailed information about your leads and their interests.

These small pieces of code have been utilized to incredible effect by marketers across the globe and have resulted in more sales than can be counted. So if you want to stay a step ahead of your competition, then you should learn a thing or two about this cool tech!

But what are cookies exactly, how do they impact affiliate marketing campaigns, why you should utilize them,  and what are some of the challenges that they have to overcome? To find out this and more, stick with this article and learn a thing or two!

What exactly are cookies?

Cookies are small pieces of data that websites store on your computer. They are used to keep track of your activity on the site and can be helpful for things like remembering your login information and preferences. These are often referred to as "first-party cookies". However, some cookies can be harmful to your privacy and security. These are called third-party cookies because they are not set by the website you are visiting, but by another party, such as an advertiser.

Third-party cookies are used to track you across the web and collect data about your interests. This information is then sold to marketers who use it to target ads at you. For example, if you visit a website about shoes and a third-party advertiser has placed a cookie on your computer, that advertiser may show you ads for shoes the next time you visit a different website.

While third-party cookies can be useful for marketers, they do raise a number of privacy and security concerns. Some users may not like the idea of their browsing activity being tracked, particularly when this information is then used to target them with ads. Additionally, there have been instances where malicious actors have used cookies to steal sensitive data or even hack into people's computers.

But we as affiliate marketers can gain valuable knowledge from these cookies and utilize them to improve our campaigns. But before doing anything of the sort, it is important to understand the ups and downs of them and learn how to best utilize them for your own benefit!

How do cookies affect affiliate marketing?

Affiliate marketing campaigns generally rely on first-party cookies, which are set by the website you are visiting. These cookies track your activity on the site and allow the affiliate program to identify you as a potential customer. If you then purchase something from the website, the affiliate program will be notified and will pay a commission to the affiliate who referred you.

While first-party cookies are generally considered more secure than third-party cookies, they can still be used by malicious actors to track your online activity. Many users also prefer to opt-out of this type of tracking in order to protect their privacy. As such, some affiliate marketing campaign managers have turned to third-party cookies in order to reach their target audience more effectively.

These trackers are usually much more potent and enable access to information that would otherwise be hidden from affiliates. This has its positives for the marketers, but most customers might not like just how much data you can extract from their behavior on the net through them.

Despite the privacy concerns, third-party cookies can be a valuable tool for affiliate marketers. They allow you to reach a wider audience and collect more detailed information about potential customers. This information can then be used to customize your campaigns and improve your chances of success.

The biggest challenges cookies are facing

European Union GDPR law

Cookies were slowly but surely running rampant on the web. Companies like Facebook managed to track users across the whole internet even if they didn't have a Facebook account in the first place. This breach of privacy and constant spying has rubbed the EU regulators the wrong way. So they decided to limit the reach of those cookies drastically and require websites to ask users if they accept the cookies and trackers in the first place.

Tech Giants

This huge step made a huge dent in the tracking capabilities of companies and it opened the gates to even further regulations. Recently, companies like Apple have started taking the privacy of their users even more seriously, so they created custom solutions to prevent spying on users.  Including limiting cookies and other tracking pixels even further.

Cookie Blocking

One of the biggest challenges facing affiliate marketing campaigns that utilize third-party cookies is avoiding cookie blocking. Many web browsers and anti-tracking software now come with features that prevent or limit third-party cookies, which can significantly reduce the effectiveness of an ad campaign. Marketers can get around this by using more sophisticated tracking methods, such as browser fingerprinting or IP tracking, but these are also vulnerable to blocking.

Despite these challenges, affiliate marketers who utilize third-party cookies can still achieve significant success. For one thing, they have a much broader potential audience since the cookies work across multiple websites and platforms. Additionally, cookies can be used to identify leads with a high likelihood of making a purchase, which can help marketers focus their efforts on the most promising leads and improve campaign ROI.

Alternatives To Cookies?

Despite what some might claim, tracking people on the internet will likely become more common than ever in the next few years. Some of the biggest tech giants are actively developing new and more efficient ways to track users and learn all sorts of details from them.

Until those next-generation tracking solutions hit the free market, here is what you can do in the meantime!

One possible solution to the cookie blocking problems is to use other types of tracking codes. These might not be as precise, but they can still provide valuable insights into your audience and help you optimize your campaigns.

Another option is to invest in conversion tracking software that helps you monitor user behavior on your website even if they don't click through to your affiliate links. This can give you valuable insights into what leads are interested in your products and how likely they are to convert.

CIAMs (Customer Identity Access Managers) is also a thing that might have a big impact on the future of online tracking. CIAMs help collect personalized data on customers and aggregate it together in a database. These CIAMs incentivize users to use them as they make creating a new account on any platform a simple button click. Or as you might have seen it "Sign up with X".

The Future of the Industry

With the development of potent AI technologies and complicated tracking algorithms, so will tracking users on the internet evolve and become more potent than ever before.

The only hiccup that affiliates might face soon is a further lockdown on user tracking through third-party pixels while no great alternative is available.

Remember, that no matter what some say, third-party cookies are still incredibly effective and useful if used properly. Utilize them right away as we have no idea how long they will stay this effective.

That being said, things will eventually change and a new way to track people on the internet will be needed. When that time comes, make sure you're among the first to adopt the new technologies and stay ahead of the curve!

What are your thoughts on third-party cookies? Let us know in the comments below!